/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
CALGARY,
AB, May 27, 2022 /CNW/ - Pathway Health Corp.
(TSXV: PHC) ("Pathway" or the "Company") announces
that it has issued a secured promissory grid note (the "Bridge
Note") to Avonlea-Drewry Holdings Inc. (the "Lender")
for available proceeds to the Corporation of up to Cdn.$1,000,000 (the "Loan"). The Loan has a
term of 90 days from the date of issuance (the "Term"), and
is secured against all of the assets of the Corporation, pledges of
the shares of the Company's subsidiaries and is supported by a
secured guarantee of the Company's wholly-owned subsidiary, Pathway
Health Services Corp. The Corporation may draw on the available
proceeds of the Loan from time to time during the Term, and any
amounts outstanding under the Bridge Note shall bear interest of
15% per annum, payable with any outstanding principal at the end of
the Term.
The Loan contains certain other customary financial and other
covenants, and will be used for general working capital purposes.
The Bridge Note is intended to provide immediate capital to the
Company while it seeks additional sources of capital, which may
include the future issuance of other debt or equity securities,
including, without limitation, a formal credit facility, whether
with the Lender or otherwise, to meet the Company's long term
capital needs.
The Bridge Note is not subject to any interest, fees, and
bonuses, including cash bonuses, future bonuses, or bonus of common
shares in the capital of the Company. The Lender is a company of
which Mr. Michael Steele, Chairman
of Pathway, and Ms. Alison Wright, a
director of the Company, are directors, officers and shareholders
(the "Insider Subscription"). The Insider Subscription is
considered to be a "related party transaction" as defined under
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions ("MI 61-101"). The
Company has relied on exemptions from the formal valuation and
minority shareholder approval requirements contained in sections
5.5(a) and 5.7(1)(a) of MI 61-101 in respect of the Insider
Subscription as the Company is not listed on certain specified
markets and neither the fair market value of the subject matter of,
nor the fair market value of the consideration for, the Insider
Subscription, insofar as it involved related parties, exceeded 25%
of the Company's market capitalization. The Company did not file a
material change report more than 21 days before issuing the Bridge
Note as the details of the above mentioned Insider Subscription
were not settled until shortly prior to closing, and the Company
wished to close on an expedited basis.
The Loan was approved by the members of the board of directors
of the Company who are independent for the purposes of the Loan,
being all directors other than Mr. Steele and Ms. Wright. No
special committee was established in connection with the Bridge
Note, and no materially contrary view or abstention was expressed
or made by any director of the Company in relation thereto.
None of the securities sold in connection with the private
placement will be registered under the United States Securities Act
of 1933, as amended, and no such securities may be offered or sold
in the United States absent
registration or an applicable exemption from the registration
requirements. This news release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any
sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Neither the Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the Exchange) accepts
responsibility for the adequacy or accuracy of this Press
Release. The TSX Venture Exchange Inc. has in no way
passed upon the merits of the proposed transaction and has
neither approved nor disapproved the contents of this press
release.
Cautionary and Forward-Looking
Statements
This news release contains forward‐looking
statements and forward‐looking information within the
meaning of applicable securities laws. These statements relate to
future events or future performance. All statements other than
statements of historical fact may be forward‐looking
statements or information. Forward‐looking statements
and information are often, but not always, identified by the use of
words such as "appear", "seek", "anticipate", "plan", "continue",
"estimate", "approximate", "expect", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe", "would" and similar expressions. More
particularly and without limitation, this news release contains
forward-looking statements and information concerning the use of
proceeds of the Bridge Note and the Company's future
financing activities. The forward-looking statements and
information are based on certain key expectations and assumptions
made by the Company. Although the Company believes that the
expectations and assumptions on which such forward-looking
statements and information are based are reasonable in the
circumstances, undue reliance should not be placed on the
forward-looking statements and information because the Company can
give no assurance that they will prove to be correct. By its
nature, such forward-looking information is subject to various
risks and uncertainties, which could cause the actual results and
expectations to differ materially from the anticipated results or
expectations expressed. These risks and uncertainties, include, but
are not limited to the Company being unable to use the proceeds of
the Bridge Note as described, legal or regulatory impediments
regarding the Bridge Note, the Company defaulting on the Bridge
Note leading to enforcement under the security, the proceeds being
insufficient for the Company's purposes, the Company's inability to
repay the Bridge Note at the end of the Term and the Company being
unable to raise additional funds on terms acceptable to the Company
or at all. Readers are cautioned not to place undue reliance on
this forward-looking information, which is given as of the date
hereof, and to not use such forward-looking information for
anything other than its intended purpose. The Company undertakes no
obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as required by law or the TSX Venture
Exchange.
SOURCE Pathway Health Corp.